Redundancy/Not signing on/tax question
Question for the might if the STW collective, tried google and various gov. websites but cannot find the answers, so here is the scenario, I have a mate who has been made redundant, they got an okay payout, and are currently working out the notice, and are confident of getting work, however when they finally finish with the current company, do they have have to declare themselves unemployed/redundant/sign on for purposes of tax/NI?What happens if they finish working with the current employer and then do not sign on, or manage to find work for a couple of months, (living off the redundant payout) are they in any way liable to pay any tax/NI even though they are not working, do they have to prove they are not working, even though they haven't signed on/declared themselves unemployed to the relevant agency, my mate is a bit worried about this, they'd rather leave current job, and then throw themselves into hunt for new one and live off redundancy as confident of finding work, but is worried about being liable for tax/NI for any period of absence from work whilst 'between' jobs. Sorry about the long winded post my mate isn't on STW so I said I'd ask the question for them, I just hope that I make sensePosted 10 years ago
I think redundancy pay is tax free (upto ~32k in 1 tax year) regardless of what you do afterwards.
Unemployment benefit stops if you have over a certain amount of savings (cant remember the figure)Posted 10 years ago
I think he needs to sign on even if getting no benefit to keep his NI records up to date. You don't want a gap in NI records and he will probably be entitled to some benefits anywayPosted 10 years ago
Cheers TJ that's what I thought, but couldn't find anything about it on the .gov sites, hate for them to get a NI bill when they eventually reappear on the system, don't think try they'll be entitled to anything due to a combo of savings and redundancy, but it was the gap in NI/tax that was the concernPosted 10 years ago
Just because they are confident of finding work quickly – doesnt mean its going to happen. and they may get a nasty suprise how tough it is ATM, with so many people going for each job.
you can start the jobseekers application on your first day out of work, by filling in the form online at direct gov site. then after the inital interview to sign the forms it is a trip to the jobcentre to sign on every couple of weeks.Posted 10 years ago
You're entitled to 6 month contibution based JSA regardless of savings. You dont need to sign on, but doing so keeps your NI contributions up to date as already said.Posted 10 years ago
We pay tax, so when your offered some back in the form of Dole, take it.
It will fill your tank of petrol and help to pay for a good days bike riding.Posted 10 years ago
The contributions based job seekers allowance is around £180 a fortnight so it's not to be sniffed at. There are also a bunch of other benefits that you can claim if you are signed on and it goes longer than you anticipate. Apart from having your NI contributions paid as has already been identified here, moving into a new role could take longer than he anticipates, even in this climate of semi-recovery. If that were to happen, not having anticipated it would make the experience significantly harder to manage.Posted 10 years ago
Is there any penalty for not signing on, and having a break in your NI/tax contribution history?Posted 10 years ago
The potential for reduced dole payouts in the future.
Seriously, unless the guy has a firm job offer, he should sign on. You get through your savings at an astonishing rate when you're out of work, and there's no way to ever backdate dole.Posted 10 years ago
I was made redundant in August 2000, with a finish date of the 21st. I was allowed to take garden leave between being informed and the effective date, so I used that time to do some job hunting; found a job and had a start date of 1st September.
For 10 days worth I didn't bother signing on.
New job turned out to be crap so I kept looking, and found another one 15 miles nearer home within 6 weeks but that's another storyPosted 10 years ago
I have dissapeared off the radar several times during my life, once for three years. All I got was a polite but rather befudled letter saying "erm who are you and where have you been" when I got a temp job one christmas after surfacing.Posted 10 years ago
I just said I'd been travelling (not entirley true, but I had been moving around a lot) and heard no more about it.
A year ago I got a letter saying my NI contributions were 19p short so I sent them stamp and told them to keep the change.
I've signed on several times (once for a year) and I cliamed working tax credits for three years too.
I really can't see your mate having a problem if he can support himself then perhaps it's the sensible option as opposed to costing the already cripled state cash it doesn't have. If he doesn't have any money and needs to sign on then do so as that's what it's for, it's not a mandatory handout for anyone who isn't working, it's to support those with no access to funds with which to support themsleves. I think both Benthan and Keynes would support me on this one depsite being 150 years apart in their social policy making.
As already said, it would be prudent for your friend to sign on if there is a risk of him not finding work in the near future, but I know a few friends and family who did not sign on because they felt they were in a sufficiently privileged position to not need it (i.e. partner working, savings etc.). Your friend does not have to
liable' to pay NI. Your NI contributions can fall below the expected amount, in which case you get a letter (or several in my case!) giving the deficit and asking whether or not you wish to make up the shortfall. This is the individual's choice and depends on what they feel about 'risk', the future of state pensions, likelihood of needing state benefits in the future and so on, vs keeping the money in their own pocket and making it work for them.
I would note that, if your freind does struggle to find work by next March, make sure he sends off his P60 to his tax office together with the correct form to get a tax rebate for this year's taxes he has paid whilst employed. Otherwise he will get his rebate (usually over several months) once back on a PAYE system.Posted 10 years ago
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